EU v. Developing World
On the headlines, the current elbowing appears to be between Europeans and the developing world. Up to now, the tradition has been World Bank top job goes to an American; European (more likely than not French) gets IMF Chief, and the US also gets IMF Deputy Chief, (currently John Lipsky). The developing world now wants to secure the top IMF spot, (not only China but countries as Brazil have voiced an intention to prompt the IMF from the standing “tradition”).
Developing World Not Monolithic or United – Turkey’s Kemal Dervish
The developing world is not monolithic in its position or candidate(s). For example, Turkey which considers itself both developing and European may have its own candidate, Kemal Dervish, former Finance Minister of Turkey during blooming period for Turkish economy, UNDP Chief and World Bank official – (and my colleague from days when we began renegotiating Bosnia & Herzegovina’s debt and status succession with World Bank/IMF). However, Turkey and Kemal Dervish (Photo Above) may be seen as too close to the West by some who are anxious to erode US as well as European influence in the global financial institutions. Asian in this case may mean both race and someone who Beijing feels it can influence.
French Woman with Standing & Current Experience
The French are both agile and fortuitous under the circumstance. After one may have thought the French had the most to lose as one of their own, Dominique Strauss-Kahn, “DSK”, has been shamed and forced to resign, they have what appears like an ideal candidate ready to step in: a respected French Finance Minister directly involved in the current negotiations on Ireland, Portugal and Greece, and, oh yes, if we want to deal a blow against male domination, Christine Lagarde happens to be a woman.
The French have also played it cleverly in the selection process itself by calling upon the rest of the European Union to unify behind and support an “EU candidate.” The rest of Europe is not inclined to step in front of a woman especially, even if she may be another French nomination More critically, unity and speed may be necessary to push through a European IMF Chief before the “developing world” manages to coalesce behind one candidate.
The EU is undoubtedly more united and institutionally agile than something labeled the “developing world.” Some would only back an Asian candidate to breaks Europe’s hold on the top spot. However, I’m not certain most developing countries would embrace a Chinese sponsored candidate. Rathe , most would prefer a candidate that is independent but also receiving Chinese votes.
Votes are important here. The IMF is technically more like a corporate rather than political institution. It has 187 members or shareholders, with a 24 member Executive Board. The EU as whole controls approximately 29%, the US 16+% and China 6% by comparison. Between the EU, the US and a few allied members, it was not that difficult for the standing traditional allocation of top spots to be maintained. However, economic might is shifting East and South and soon IMF voting power is to follow, but maybe not yet to get a European out of the top spot for now.
The New Arrangement
Rather, the new “arrangement” is likely to have the Europeans still securing the top IMF slot, but the developing countries will get the Number 2, at the expense of the US. Washington would still have dibs on the top World Bank spot.
The selection of top IMF officials is in theory “merit based and transparent” as John Lipsky has recently stated in describing the process. However, the reality is different, and like elections of corporate leaders, swapping votes and favors is part of the crude jockeying, even if not seen beyond the Board Room.
“Global Reserve Currency”
China’s strategy goes beyond the person selected to an underlying agenda increasingly evident and advocated by Beijing. It wants less of Washington’s influence over the global financial system, and is seeking to reduce US Dollar status as the globe’s major reserve currency. However, rather than promote the Euro or its own currency as US Dollar alternatives, it has promoted the notion of a new Global Currency, and backed by the IMF, (“Special Drawing Rights - SDRs”).
China may not be as agile, but in the end it will position its influence not in terms of a personality to be selected as IMF Chief but securing a favorable climate for its broader and even more important agenda on a new global reserve currency, perhaps in the form of SDRs.
Score: US – “minus 1”, France - “not loser, maybe even winner” & China – “Plus for its global Agenda”, US Dollar – “Flushing?” (See Photo).
Sex initiated (forced or not) by a French IMF Chief , against an African woman in America results in the succession of a French woman to the same spot, with the US losing a seat and China gaining a platform from which to dethrone the US Dollar as global currency king!
Related Reports at - http://diplomaticallyincorrect.org/c/international-financial-crisis
Latest FILM REPORT – “IMF Selecting New Chief, after DSK” - http://diplomaticallyincorrect.org/films/movie/imf-selecting-new-chief-after-dsk/27013
By Ambassador Muhamed Sacirbey
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